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Contradiction Between Supply And Demand To Suppress PTA Rebound

2010/6/13 10:24:00 30

from

crude oil

On the supply side, with the rise in oil prices, the organization of Petroleum Exporting Countries (OPEC) began to be somewhat ambiguous about the cut in production.

In June 23rd, Kuwait's oil minister said that OPEC would not decide to cut production at the September meeting.

Data show that OPEC5 month crude oil production increased, the average daily growth of 290 thousand -40.5 million barrels, if oil prices continue to rise, the organization's further increase in production probability.

In terms of demand, the World Bank continues to lower the forecast of the global economic situation, and the global GDP is expected to shrink by 2.9% in 2009. It will take time to get out of the recession.

According to past rules, the demand for gasoline in the US will rise sharply in May, but the recovery of this year has not appeared.

Early speculation has pushed oil prices to more than $70 a barrel, and the rise in demand has become a major factor in speculation. At the moment, speculation has come to an end. The medium term head shape of crude oil has emerged, and the return of commodity attributes has made the fundamentals have not improved significantly.

The upstream raw material of PTA is PX (p-xylene), while the upstream of PX is MX (mixed xylene).

As of May 24th, FOB

The Republic of Korea

The price of PX is US $981 / ton, and the price of FOB Korea MX is US $789 / ton, the difference between them is US $192 / ton.

Usually, the reasonable price difference between the two is at the normal level of 160-170 US dollars / ton.

Theoretically, if the price difference exceeds the normal level, the output of PX will increase, which will also limit the rise of PTA price.

In May this year, China's PX imports reached 334 thousand and 800 tons, only 214 thousand and 900 tons in May last year, an increase of 35.81% over the same period last year. The pressure on the domestic market has increased a lot, especially in the absence of improvement in textile exports.

From the upstream PX capacity, the new capacity of 3 million 900 thousand tons will start in the second half year.

Especially in the next period of time, Fujian refining and chemical 700 thousand tons / year, Fu Jia Dahua 800 thousand tons / year, Huizhou refining 800 thousand tons / year will be gradually launched, the three quarter of Shanghai Petrochemical 600 thousand tons / year device will also be put into production.

The commissioning of these devices will increase the upstream raw materials of domestic PTA. According to the current operating rate of more than 80%, the output of PTA will increase significantly in the second half of this year, which will be the dominant factor to suppress the rebound of PTA prices.

Demand is temporarily difficult to improve.

According to the seasonal rule, 6-8 months are the traditional off-season of textile industry.

At the same time, China's textile and garment exports decreased by 1.5% in May, down 14.75% compared with the same period last year, and the export environment has not improved.

Data show that the export volume of PET chips in May was 66 thousand and 800 tons, 95 thousand and 500 tons in May last year, the export volume of polyester staple fiber was 33 thousand and 400 tons in May, 38 thousand and 900 tons in May last year, and 34 thousand and 800 tons in May polyester filaments, 69 thousand tons in May last year.

80% of our country

textile

It is for export, from the above data, we can see that exports have not improved, and domestic demand can not digest these stocks.

At present, the running rate of polyester in the lower reaches of China has been maintained at over 70%, while the PTA's index has remained at 2.5 equilibrium for most of the time.

The upstream production capacity is increasing, and downstream consumption is sluggish. As the core of the industrial chain, PTA's own situation is hard to be optimistic.

Recently, the domestic PTA operating rate has maintained a high level, and remained at over 80% in most of June.

In the second half of this year, some new capacity plants will start, and the 900 thousand tons / year PTA device of Chongqing orient hope group will start in 8-9, and the supply of PTA will also increase.

At the same time, imports also increased significantly. In May, the import volume of terephthalic acid in China reached 466 thousand tons, a marked increase over last year's 391 thousand tons.

The PTA market is still in a state of oversupply, which is expected to intensify in the second half of the year.

PTA supply and demand fundamentals do not support the upward trend of prices, and the space for upward rebound is limited.

At the same time, the global economy is still in the doldrums before the recovery, and trade protectionism has a tendency to upgrade.

Europe and the United States begin to part with China

Exit

Special safeguard adjustment for products.

For example, the US trade association has taken action in terms of tire imports in China, and India and Brazil are doing the same.

For the textile industry, China's low cost textile products are also facing the same problems in the European and American markets.

We fear that once trade protectionism is in flood, China's textile industry, which relies heavily on exports, is undoubtedly overcast and rainy.

To sum up, upstream PX capacity expansion and downstream polyester consumption are low, making PTA prices unlikely to rebound significantly.

From the perspective of morphology, the PTA price is expected to continue to fall below 6600 yuan / ton in the early stage when it comes back to the golden section near 7000.

It should be noted that because the current PX-MX spreads are near normal level, the sensitivity of PX to crude oil will increase, and the price fluctuation of PTA will be affected in the short term. Therefore, we should pay more attention to the trend of crude oil in operation.